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Some Challenges in the Empirics of the Effects of Networks

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  • Boucher, Vincent

    () (Université Laval)

  • Fortin, Bernard

    () (Université Laval)

Abstract

We study some recent developments and challenges in the empirics of the effects of social networks. We focus in particular on researchers' ability to make policy recommendations based on a standard linear econometric model. We examine the potential compatibility between this type of econometric model and a microeconomic theoretical approach based on fundamentals, such as preferences, technology and decision processes. We discuss sources of identification for the social multiplier as well as for the identity of the key player. We study the possibility of testing endogeneity in network formation. We analyse the use of proxy variables and their impact for the causal interpretation of the peer effect coefficients. Our analysis suggests that greater care should be taken in grounding econometric network models to sound and credible theoretical underpinnings.

Suggested Citation

  • Boucher, Vincent & Fortin, Bernard, 2015. "Some Challenges in the Empirics of the Effects of Networks," IZA Discussion Papers 8896, Institute for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp8896
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Rokhaya Dieye & Bernard Fortin, 2017. "Gender Peer Effects Heterogeneity in Obesity," Cahiers de recherche 1702, Centre de recherche sur les risques, les enjeux économiques, et les politiques publiques.
    2. Timothy Conley & Nirav Mehta & Ralph Stinebrickner & Todd Stinebrickner, 2015. "Social Interactions, Mechanisms, and Equilibrium: Evidence from a Model of Study Time and Academic Achievement," NBER Working Papers 21418, National Bureau of Economic Research, Inc.
    3. repec:ris:jspord:0941 is not listed on IDEAS
    4. Matthew O. Jackson & Brian W. Rogers & Yves Zenou, 2017. "The Economic Consequences of Social-Network Structure," Journal of Economic Literature, American Economic Association, vol. 55(1), pages 49-95, March.
    5. Boucher, Vincent, 2016. "Conformism and self-selection in social networks," Journal of Public Economics, Elsevier, vol. 136(C), pages 30-44.
    6. Olcina, Gonzalo & Panebianco, Fabrizio & Zenou, Yves, 2017. "Conformism, Social Norms and the Dynamics of Assimilation," CEPR Discussion Papers 12166, C.E.P.R. Discussion Papers.
    7. Patacchini, Eleonora & Rainone, Edoardo & Zenou, Yves, 2017. "Heterogeneous peer effects in education," Journal of Economic Behavior & Organization, Elsevier, vol. 134(C), pages 190-227.
    8. Matthew O. Jackson & Brian W. Rogers & Yves Zenou, 2016. "Networks: An Economic Perspective," Papers 1608.07901, arXiv.org.
    9. Hahn, Youjin & Islam, Asadul & Patacchini, Eleonora & Zenou, Yves, 2015. "Network Structure and Education Outcomes: Evidence from a Field Experiment in Bangladesh," IZA Discussion Papers 8872, Institute for the Study of Labor (IZA).
    10. Lindquist, Matthew & Sauermann, Jan & Zenou, Yves, 2015. "Network Effects on Worker Productivity," CEPR Discussion Papers 10928, C.E.P.R. Discussion Papers.
    11. Vincent Boucher & Marion Goussé, 2015. "Wage Dynamics and Peer Referrals," Cahiers de recherche 1514, CIRPEE.
    12. Del Bello, Carlo & Panebianco, Fabrizio & Verdier, Thierry & Zenou, Yves, 2016. "Cultural Transmission and Socialization Spillovers in Education," CEPR Discussion Papers 11419, C.E.P.R. Discussion Papers.

    More about this item

    Keywords

    social networks; social multiplier; network formation; identification; proxy variables; policy analysis;

    JEL classification:

    • A14 - General Economics and Teaching - - General Economics - - - Sociology of Economics
    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • C36 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Instrumental Variables (IV) Estimation
    • D85 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Network Formation
    • Z13 - Other Special Topics - - Cultural Economics - - - Economic Sociology; Economic Anthropology; Language; Social and Economic Stratification

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